It's a classic Harvard Business School case study: A demanding owner of a company is ready to replace his operations manager despite a dozen loyal and successful years.
Harvard MBAs: Welcome to Yankee Stadium.
Owner George Steinbrenner, not content with making baseball's postseason, and perhaps sore over a $200 million payroll and no World Series ring since 2000, has already said his manager Joe Torre could be out if the Yankees did not beat the Cleveland Indians.
Unfortunately for Mr. Torre, Cleveland whacked the Yankees around on Monday night, winning 6 to 4, and will now play the Boston Red Sox, starting on Friday. In the National League the Colorado Rockies will take on the Arizona Diamondbacks starting Thursday.
But New York likes him
If Steinbrenner does not renew Torre's contract – the most expensive for a manager in baseball – the decision is likely to be debated beyond baseball circles. Mayor Michael Bloomberg has already come out in favor of Torre as someone who can manage anything. And, presidential candidate Rudolph Giuliani, known to don his Yankees cap often, is a friend of Torre's.
"It would probably be one of the most controversial changes," says Andrew Zimbalist, a professor at Smith College in Northampton, Mass., and author of several books on the sport. "The players love him, most of the fans like him a great deal, but he's made some questionable decisions and he is paid $7 million a year."
Exactly when Steinbrenner might make his move is not certain. In the past, he has met with his "brain trust" in Tampa, Fla., shortly after the Yankee's season ends. From those discussions, the Yankees organization makes announcements which could come at any time.
A company is a company
In some respects Torre's predicament is similar to tens of thousands of executives around the world. They face scrutiny from senior management and investors. So far this year, according to Challenger, Gray, & Christmas, Inc. in Chicago, some 1,043 CEOs have lost their jobs. "They are changing like baseball managers," quips John Challenger, CEO of the outplacement firm. "It's all about 'What did you do for me today?'"
Torre's tenure at the Yankees is actually somewhat better than that of the average CEO. This year, managers are being replaced after they've run their companies for a little over nine years.
"What happens normally is that your mistakes pile up and the longer you are there the more mistakes stand out," says Mr. Challenger. "You only have a certain number before someone gets you."
For Torre, the biggest issue, says Challenger, is whether he and the team have lost some of the spark. "The question is whether he is fading a little bit."
However, managing the Yankees presents its own set of challenges. Some of the players are earning more than the CEOs of Fortune 500 companies. In fact, in the Yankee's organization, according to Cot's Baseball Contracts, there are eleven players earning more than Torre.
Managing the Yankees is less about making on-the-field decisions and managing the egos and pressure, says Mr. Zimbalist.
"Torre's virtue is that of a psychology manager," he says. "His talent is maximized in New York."
Some baseball analysts agree. "He's perfect for this city, there's no one better," says Ed Randall, host of radio's 'Talking Baseball'. "He wants to come back. He wants to be manager for life."
Handling the boss
Like many managers, Torre has learned how to manage his boss. On Monday afternoon at a press conference, he said he does not fight Steinbrenner because he understands who owns the team. "I think when you come in and understand that, then it's a matter of understanding he's entitled to say what he wants," said Torre. "He can be as critical or as complimentary as he wants to be any time he wants to be that."
Torre is also mindful of Steinbrenner's demanding nature. He recounted how he had just finished beating the New York Mets in the 2000 World Series. "You thought you'd reached nirvana at that time," he said.
But, a day or two after winning, he had a conversation with the Boss. "He's all; 'Right, what are we going to do next year?' It's just what he is." On Monday night, after losing to Cleveland, Torre shied away from answering questions about whether he even wants to return to the his job. He talked about decompressing at his home for several days. And, even if he does not return to the Yankees, he might be in the running for another club. "I am not ready to move somewhere and not do something," he said.